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  "documentTitle": "Monotype Imaging Holdings Inc. (TYPE)",
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  "authorName": "Jeffrey C. Smith and Clifford Press",
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  "presentationDate": "2018-02-13 00:00:00",
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  "notes": "The slide uses a bar chart to visualize margin erosion following acquisitions, specifically highlighting the Olapic deal.",
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      "text": "Of all the strategic missteps, perhaps most concerning is the Company’s decision to acquire Olapic in July 2016.",
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      "text": "EBITDA margin trend from 2005 to 2017E",
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      "kind": "disclaimer",
      "text": "The $149 million price includes the $130 million announced transaction price and $19 million in stock given to Olapic's founders. The $17 million revenue figure represents 2016A revenue, including $3.2 million in deferred revenue.",
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      "text": "EBITDA margin: 2,841 BPs",
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      "text": "Of all the strategic missteps, perhaps most concerning is the Company's decision to acquire Olapic in July 2016. Olapic, which focuses on social media and competes with companies like Facebook, Adobe, and a host of start-ups, is outside the sphere of Monotype's expertise.",
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      "text": "Even with the most optimistic projections, it would have been difficult for Olapic to generate the cash flows necessary to realize an acceptable return on investment. Therefore, it should not have been surprising that Monotype shareholders reacted so negatively.",
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      "text": "More alarming is the staggering price paid – $149 million for a company with less than $17 million of revenue (a 9x revenue multiple) and no operating profit – which reflects both a lack of financial discipline and a questionable commitment to shareholder value.",
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      "kind": "quote",
      "text": "“kind of a bet with shareholder money.” — Monotype 11/30/2016 Investor Day Call.",
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      "kind": "source-note",
      "text": "Source: Company filings and CapIQ.",
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      "text": "Olapic Acquisition – A Failure of Oversight by the Incumbent Board",
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